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usiness WITH media technology CNN seeks sizzle with a food show The Media Equation DAVID CARR MichaelK.Williams played Omar Little, the righteousstickup man in ‘‘TheWire,’’ and now plays Chalky White, the bootlegger on ‘‘Boardwalk Empire,’’ so he is a big deal in the East Flatbush housing projectsinNew York where he grew up. Standing in Gloria’s 3, a Trinidadian restaurant in nearby CrownHeights last Thursday, he said he had funrunning around his old neighborhood. But he added that itwas the man hewas with who createdmost of the fuss. ‘‘All the little kids were running after him,’’ Mr.Williams said, indicating his lanky dining companion. Anthony Bourdain tends to get noticed. The chef turned televised tour guide is macho but not overbearing, profanewithout being coarse, and tall and handsome. How handsome?Iwas at an outdoorsocial eventwithmywife some years agowhenhe passedby, and shewas sotransfixedbyhimthat she walkedinto abush. Ihate him for that, but am unsurprised that his charmed life is about to addanew chapter. Mr. Bourdain and Mr.Williams were in Brooklyn filming the lastepisodeof Mr. Bourdain’srough-and-ready culinary show ‘‘No Reservations,’’ which has runfor eight seasons on the Travel Channel. Last week, CNN and Mr. Bourdain announced that he would be moving to the cable news channel to make an as-yet-unnamed travelshow thatwill air on the weekends. ‘‘Elevenyears ago, I was standing by adeep fryer,’’ he said, his voice conveying wonderashe and Mr.Williams capped the day’sshooting with a dinner of oxtail stew, curriedgoat, soup and macaroni pie. ‘‘I was surprised and flattered that anews organization was interestedindoingashow withme.’’ Sowerethe restof us. CNN,the former cable newsleader, is at loose ends, having recordeditslowest ratings in 10 years in April. The channel still makesalot ofmoney, an expected $600 millioninoperating profitthis year. But nothing — not the liftofan electionyear,the replacementof Piers Morgan for Larry King or firm edicts from TimeWarner management—has moved the needleon viewership. Evenasprofits pileup, CNN is in danger ofbecoming a niche channel. Perhaps signing a proven niche player — according to Nielsen,Mr. Bourdain’s show drawsabout 450,000 viewers ona channel that lives far down the dial — is a small partof the answer. It is not as if Mr. Bourdain is a television lightweight: He and his production company ZeroPointZero, which will continue to producethe show, have won Emmys forprograms onHaiti and Laos, and the crew was nominatedforan Emmy foranepisode shot in Beirut during the 2006Israeli offensive in Lebanon. Mark Whitaker,executive vice president and managing editor of CNN Worldwide, has been working to decreasethe network’srelianceonpolitics,where its middle-of-the-road approach oftensuffers in comparison with theedgier, more partisan offerings of SUN,FROMPAGE14 closed the Sunday-only Newsafterrevelations about widespread phone hacking. Mr.Murdoch visited thetabloid’s inkstained newsroom in East London’s Wapping district, and, shirtsleeves rolled up, sent amessagetohis detractors and declared his commitmenttothe printed word. ‘‘Having a winning paper is the best answer to our critics,’’ Mr. Murdoch told the newsroom upon announcing the Sunday edition. Giddy with excitement as if itwere his first newspaper, Mr. Murdoch later tweeted: ‘‘Reports early, but new Sun edition sold 3m!’’ and ‘‘I will be very happy at anything substantially over two million!’’ The Sunremains the most-read newspaper in a country so enamored of tabloid gossip that an anti-litter campaign scattered throughout the London Underground reads: ‘‘The newspaper you’re reading is rubbish.’’ The Sun’s discounted cover price of30 pence, or about 46 U.S. cents,on weekdays and 50 pence, or 77 cents, on Sundays has helped the newspaper maintain itslead, the audit bureau said in its most recent circulationreport. News Corp. declined to comment on the Sun’s circulation. The Sunisalsooperating in a delicate era in Britain when everything done by newspapers, Murdoch-owned or not, is under increased scrutiny. That scrutiny is especially apparent at The Sun. British investigators have said The Sun participated inwidespread bribery of ‘‘a network ofcorrupted officials,’’ and several of the newspaper’s top journalists have been arrested. Last month, Rebekah Brooks, the former editor of both News of the World and The Sun, was formally charged with obstruction ofjustice. Newsroom morale at The Sun has sagged asthe management and stan- FoxNews and MSNBC. He began talking with Mr. Bourdain back in March in the belief thatthe chef’spenchant for traveling to far-flung places like Thailand and Saudi Arabia wasafitwith CNN’sinternational credentials.More important, Mr.Whitaker wanted CNN’s first move out ofits lanetocomewitha baked-in audience attached. CNN has notrouble attracting viewers; it just has trouble persuading them to stick around when theworld is not on fire. ‘‘Tony is appointmentviewing and sticky in a way thatweneed to be,’’ Mr. Whitaker said on the phone. ‘‘We are big fans of what he does and what he stands for,which is global and smart, but he goesbeyond politics and war coverage. We need to be broader than that and we are looking hard to make that happen. Tony was the first person that cametomind.’’ Mr. Bourdain landedinthe public consciousness in 2000 with his book ‘‘KitchenConfidential,’’ a scabrouslook atthe mayhembehind the fine dining tables of Manhattan. But he quickly outgrew the caricatureof a bad boy and became a rarityin the celebritychef world: aguy who knowsfoodbut isalot more interested in the human ingredientsbehind the cuisinethan the recipes. He loathes the motif that positions chefs as divas or rock stars, and has ‘‘He goes beyond politics and war coverage. We need to be broader than that.’’ said unkind things about someother chefs, many of whom work atthe Food Network,which is owned by Scripps Networks Interactive, which alsoowns the Travel Channel. Mr. Bourdain was not itching to change jobs — it is tough to beateating your way around the world — but he is happy for the change in address. ‘‘I have had an excellent relationship with the Travel Channel, but CNN is a big company withalot ofinternational juice,’’ he said. A graduate of the Culinary Institute of America,Mr. Bourdain did some serious work in the kitchen enroute to becoming executive chefat Brasserie Les Halles.Atthe sametime, he spent a fair amountof time sautéing his brain in a variety oflegal and illicit drugs. Whenhe got his shot attelevision, he took the jobseriously but did not adopt many of the conventions ofmedium. He often dips into bleep-able languageto express joy or disgust, is fond ofjokes about the male anatomy and has been known to snack onaraw seal eyeball when theoccasionrequired. At a timewhenpersonal brand seems ascendant, Mr. Bourdain has stretched his to very lucrative, creative ends. He hasapersonal book imprintwith HarperCollins Ecco, and has eight books lined up. He has alsowritten10 books, both fiction and nonfiction, is publishing a graphic novel this summer and has anothernovelintheworks. We hitthe Brooklyn Bridge and the lights of Manhattan snappedinto view. This is where he firstwenttowork as a bicycle messenger, riding in fromNew Jersey with his father. Thatwas followedbylong hours in the kitchen and evenlongerhours perpetrating foolhardy indulgences with theothercooks he hung out with. ‘‘Deep inside, Iamalazy screw-up and I have developed this very elaborate construction to outwitthat impulse,’’ he said. He added that his latest assignment was ofapiecewith what came before it. ‘‘This is anotherinaseries oflucky breaks that I will do my best not to screw up,’’ he said. KINECT, FROM PAGE 14 tributors of free, unauthorized copies of software created by what was then called Micro-Soft were pirates, thwarting progress by removing the financial incentives to improve technology. Alex Kipman, a32-year-old Brazilian who has spent his careeratMicrosoft, is credited byMicrosoft as the quarterback of the Kinect project. At the company’s officesinRedmond,Washington, he cheerily served up avery different version of the Kinect story. In the hackers’version,Microsoft had effectively lost control ofits ownproduct, thanks to the open source efforts fueled partly by the Adafruit OpenKinect contest. It had emerged that Johnny Chung Lee, an employee of Microsoft in theApplied SciencesGroup, had covertly bankrolled that competition, and later said — after decamping for Google —that he had done so after his ‘‘internal efforts’’ to persuade the company to support the Kinect’s potential immediately beyond games had gone nowhere. Mr. Kipman dismissed the notion that outsiders changed Microsoft’s mind about the Kinect’s potential. For starters, Kinect had not been ‘‘hacked’’ at all, because no one had cracked its proprietary code. ‘‘If you’re just person X out there, it’smuch more glamorous to call it ‘hacking,’ ’’ he continued. ‘‘From my perspective, it’s‘tinkering.’ ’’ Moreover, Mr. Kipman waved off Mr. Sunday sales slip at Murdoch’s pet SIMON DAWSON/BLOOMBERG NEWS Analysts estimated that sales of The Sun on Sunday would level off at two million copies. dards committee established byNews Corp. toinvestigate malfeasance at its newspapers has turned over hundreds of millions ofjournalists’e-mails. ‘‘The Sun isanewspaper which in most respects reflects Murdoch’s worldview,’’ said Michael Gove, aConservative member of Parliament, in his testimony on Tuesday to the Leveson Inquiry into media ethics, borne out of the phone-hacking scandal at The News of theWorld. Indeed, ofallthe approximately 175 newspapers that NewsCorp.owns globally, The Sunholds a special place in his heart, friends and associateshave said. It also drives the company’s print revenue in Britain. News Corp. does not break out profit on individual newspapers, but revenue from advertising in The Sun helps support less lucrative, more upscale titles like The Times of London and The Sunday Times. MARIO ANZUONI/REUTERS Attendees at an electronic entertainment show dancing with the Xbox video-game console and the Kinect add-on, which translates a person’s movements to the video screen. A heady evolution of Microsoft Kinect Eager to expand his footprintonFleet Street, Mr. Murdoch bought The Sun in 1969 for £800,000, assuring the previous owners hewould publish a ‘‘straightforward, honest newspaper.’’ Because of the abrupt closing of The News of theWorld, NewsCorp. already had the capacity to print and deliver a newspaper on Sunday. That means a drop inreadership at The Sun will not have a significant effect on the company’s financial performance, analysts said. ‘‘It’sallupside because The News of the World doesn’t exist anymore,’’ Mr. McCabe, the analyst, said. ‘‘They haven’t gone out and spent serious money onanew staff or equipment.’’ The Sun’s numbers also reflect an overall softening in the newspaper market in Britain, analysts said. Average daily circulationfor British newspapers combined fell 6.2 percent in April to 17 million, according to audit bureau data. Lee’s account ofinternal resistance to non-Xbox usesfor the Kinect: The master plan for the Kinect always included the PC. ‘‘Johnny wasn’t part ofanyof those conversations,’’ Mr. Kipman said. Besides, he concluded,Microsoft had no problem with the ‘‘tinkerer crew’’ because it anticipated them. Mr. Lee initially declined to comment for this article, but he did e-mail a response toMr. Kipman’s account: ‘‘The tremendous amount ofpositive press The idea of a band of outsiders forcing a huge company to rethink a major new product is appealing. coverage on Kinect projects in the months immediately following launch was worth tens of millions dollars in marketing for Xbox — and remains one of the most culturally interesting aspects of this product, keeping usactively talking about the technology today. Stimulating that for $3,000 seems like goodbusiness sensetome.’’ Either way, the incident seemed to burnish Microsoft’s reputation. Wired magazine evenpublishedanarticle crediting Microsoft for its forward-thinking attitude toward collaborating with the masses: ‘‘No company has made it so easy to hack into aproduct as popular as WOMEN, FROM PAGE 14 to Harvard for abusiness degree and worked for tech companies, including BEA Systems and Tellme Networks. Hergeekcredispretty unassailable. In 2005, she cametoKleinerasajunior partner, working as chief of staff to John Doerr. He was one of the main evangelists who shaped the modern Internet, ageek’s geek who became a billionaire. Ms. Pao’s role was to help Mr. Doerr identify investments, interview executives and write speeches. According to the suit, her troubles began almost immediately whenanotherjunior partner,Ajit Nazre, made inappropriate sexual advances. Eventually, the complaint says, Ms. Pao ‘‘succumbed to Mr. Nazre’s insistence on sexual relations on two or three occasions.’’ Whenshe put an end to the relationship, it says, he ‘‘started aconsistent pattern of retaliation against her.’’ This wentonforfive years, it contends. The harassment partof the suit pales in comparison to the retaliation part, which blends into an allegation ofageneral efforttokeep womenintheir place. Kleiner,Ms.Pao’slawsuit says, discriminated against her and other women ‘‘by failing to promote them comparably to men, by compensating themless than men through lower salary, bonus and carried interest, by restricting the number ofinvestments thatwomenare allowed to make as compared to men.’’ The firm,which has about 80 employeesherewith a handfulmore in China, is accused of failing to act when complaints ofsexual harassmentor discrimination were made. Ms.Pao says women areexcludedfrommeetings and discussions. The firm fails to provideopportunities for visibility and success inside and outsidethe firm for womenascompared withmen,the complaint says. Kleiner supporters have some questions, even ifthey do not necessarily wish to goon the record:Why did a talented woman stay forso long at a place thatwas treating herso poorly? And how is it possible that Mr. Doerr never listened to herassertions ofretaliation and discrimination? Mr. Doerr declined to comment, but his supporters have an answer. The firstthat anyone at the firm knew ofherconcerns,theysay, was five months ago —at which point Kleinerpromptly brought inalawyer to investigate. He found no basis to her complaints,the firm says. If you takethe Kleiner line, Mr. Nazre was less the instigator than the victim; he hadaconsensual affair with Ms. Pao and now is being portrayed as a harasser. The suit says he leftthe firm after the investigator’s report at the beginning of the year, implying a cause and effect. People inside Kleiner sayhe left of his own volition before the inquiry began. Mr. Nazre has not surfaced sincethe lawsuit was filed. Avoice-mail box belonging to him was full late last week. Kleinersupporters said the firm made repeated efforts to achieve aresolution, but that the parties could not come to terms. The lawsuit was filed in San Francisco SuperiorCourton May 10. Ms.Pao is known to the small world of venture capitalists here. Her husband, Alphonse FletcherJr., whomshe married after the physical relationship with Mr. Nazre ended, was recently in the news for suing the Dakota, the apartment building on Central Park West in New York, for not letting him buy afifth unit. Mr. Fletcher, aformer president of the Dakota board, said he needed the space to accommodate his growing family. the Kinect,’’ the article asserted, implying that the company planned on homebrew innovators as strategic partners. Kinect hackers may not have cared about video games, but what they wanted — adevice containing specific high-technology components for just $150 —was achievable specifically becauseofitsconnection to something with the scaleof theXbox system.Onlyacompany the size of Microsoft could afford the enormous research-and-development costs, and only mass-market appeal could make suchaproduct financially viable. KyleMcDonald, a digital artist in New York, had been working with3-Dsensor technology for years when the Kinect came out, so at first he underestimated the significance of Microsoft’s latest product. But within a week, the hacker videos and online commentary changed his mind, and he boughtone. This is evidenceofsomething evenmore surprising than the possibility that Microsoft had learned to love the hackers: Outside creators have learned to love a Microsoft product. Or ifnot love, then at leasttake it seriously. The theory that companies should wholeheartedly embrace the strange experimentation of people like Mr. Mc- Donald turns onastraightforward idea: It is goodfor the bottom line. ‘‘You get unexpected uses of your products that might contribute to a different direction your company can go,’’ said Bas van Abel, a designer in Utrecht, the Netherlands, and co-author of the book‘‘OpenDesign Now.’’ Established companies maystill resist that argument, but more and more upstarts take it for granted that acommunity of customers, hobbyists and amateurs will innovate well beyond what any company can comeup with onits own. A new version of the Kinect, specifically designed to work with aWindows PC, came out in February, along with a software kitthatwould allow developers to create commercial Kinect applications. ThePC version of the device costs $250, or $100 more than the Xbox version, but the developer software is free. By March, Microsoft announced deals with 350 commercial partners on applications for hospitals, assembly lines, work-force training and so on. Among the partners were big corporate names likeAmerican Express and Toyota. Mr. McDonald still works with the devicetoday.And he is intrigued that so many people like him are still experimenting withit and sharing the codethat makes it possible for others to do the same. ‘‘People are trying to decide for themselves what they want these technologies to mean,’’ Mr. McDonald said. The answer used to come from military contractors, academia, mega-corporations. ‘‘It can’t be just them,’’ he continued. ‘‘It has to be everyone.’’ Sexual bias lawsuit rivets Silicon Valley A lawyer found no basis to Ms. Pao’s complaints, Kleiner says. Mr. Fletcher,who is black, is accusing the Dakota of racial discrimination and defamation. The Dakota responded to the suit by saying itsconcerns were not racial but financial: it did not think he could afford another apartment. Whennews of Ms.Pao’slawsuit broke last month, ‘‘we stopped what wewere doing and were, like, ‘Whoa,’ ’’ said ClaireMazur, afounder of Of a Kind, an e-commerce start-up. Ms.Mazur said she neverhadaproblemgetting meetings with venture capitalists: ‘‘But it’sdefinitely harder to talk to male investors who don’t have as much experience with retail and fashion. That kind of personal connection can be key to getting funding.’’ Speaking only on the condition of anonymity, some entrepreneurs were more despairing. One woman said she was interviewedbyatop venture firm in 2000 after leaving business school. ‘‘I was told point-blank thatthey once had a woman and it didn’t work out,’’ she said. ‘‘Thatwas 12 years ago and theyhaven’t had a singlewoman partner since.’’ The cold stats: Women make upjust 9.1percentof the board members of Silicon Valley companies, compared with 16 percent of Standard & Poor’s 500 companies, according to Spencer Stuart, the headhunting firm. Few lawsuits like this make it toa jury, but Ms.Pao’scase might be an exception. Any settlement by Kleiner could look like an acknowledgment of guilt. The firm, meanwhile, is playing as aggressive adefense as it dares, given the legal constraints. Owen Thomas, a former Valleywag gossip columnist and alongtime Silicon Valley observer, saw the situation this way: ‘‘If a tenth of this is true, Kleiner Perkins has a problem.’’ Christine Haughney and Jenna Wortham contributed reporting.
economy companies business WITH New insight on funds for retirement Gretchen Morgenson FAIR GAME NEW YORK If recent stock market gyrations have takenabite out of their 401(k) retirement plans, participants should get ready formore discomfort. Theyare about to learn how much they are paying justtomaintain those accounts. New U.S. LaborDepartment rules will require fuller disclosure about the fees charged on401(k)’s. Fees,of course, can be an enormous drain on retirement savings, but theyareoften obscured, giving many Americans the impression thatthe accountsare somehow cost-free. A surveypublishedinFebruary by AARP, an association of middle-aged and older Americans, for example, found that71percentof those polledbelieved thatthey did not pay fees on their 401(k)’s. Six percent said they did not know whetherfees were levied. Sothe coming disclosures, scheduled to show up on third-quarterstatements this autumn, may come asashock. Still, it is better to know than to be in the dark. There are an estimated483,000 individual retirement account plans, covering 72 million participants,the Labor Department said. These accountshold about $3 trillioninassets. Greater transparency could not be more important. The new rulesare intended to ensure thatthe feesin401(k) plans are reasonable. The LaborDepartment said it hoped thatthe disclosures would help investors comparevariousinvestment offerings and see how costscaneat away at account balances. Two main feesareextractedfrom 401(k) plans: investment management fees and administrative costs.Under As worries increase, eyes are on the Fed Economic Outlook JASON LANGE REUTERS WASHINGTON The European debt crisis has frayed nerves around the world for months. Now signs of weakness in the U.S. jobs market and in Chinese factory output are giving policy makers evenmore reason to be afraid. A dark cloud will hang over the Federal Reserve Board chairman, Ben S. Bernanke, whenhetestifiesbefore lawmakers Thursday. As if the euro zone’s struggles to avoid dissolution were not enough, U.S. job creation slowed for the fourth consecutive monthinMay. ‘‘Itwould be hard to believe the Fedis not concerned,’’ said Thomas Lam, an economist at DMG &Partners Securities in Singapore. The United States was a relative bright spot in the global economy during the past year. But last week, good economic news was hard to find in almost any corner of theworld. India’s first quarter economic growth sank to a nine-year low, while agaugeof eurozone manufacturing also slipped. Especially worrisome for the global economy, a measure of activity at China’s private factories contracted for the seventhmonthinMay. That could help push China — the biggest single provider ofgrowthinthe global economy —toundertake astimulusprogram to combat aslowdown. Just asasour U.S. economy looms over President Barack Obama’sre-election bid,the possibility of rising joblessness in China frightens the Communist Party withapower transition scheduled forlater this year. In his testimony to Congress, Mr. Bernanke could provide clues on what the Fed could do tohelp growth, especially if the European crisis growsmore acute. Whether the Fed acts at its next meeting June 19 and 20 could well depend on eventsinEurope. WithGreece’smembership in the currency union possibly hanging in the balance of a June 17 election, European politicians are struggling to put together plans that would keep Greece from abandoning theeuro and othercountries, including Spain, fromfollowing it out. TopEuropean Union officials are now openly questioning whether the currency union will even survive, a warning that time is running out for the region to resolve itsdebt problems. ‘‘It’s crunch time,’’ said Nicolas Véron, aspecialistonEuropean banking at the Peterson Institute for International Economics in Washington. The European Central Bank is likely the new rules, companies administering 401(k)’s —oftenmutual fund concerns — must provideemployers who sponsor the plans withdetails ofall feesassociated withrunning the accounts. For example, feesforgeneral plan administrative services, like legal work, accounting and record keeping, will have to be disclosed. Plan sponsors are supposed to use this information to analyze whether the feesintheir plans are too high. But they will not have to pass along all of this data to participants. Instead,the sponsors will be required to calculate expense ratiosfor the investments offered in a plan, showing participants the chargesper$1,000 invested. According to astudy released last NovemberbyDeloitte and the Investment Company Institute, the median 401(k)expense ratiowas 0.78 percent. But the rangeofratiosiswide, the report noted: from 0.28 percentto1.38 percent. Expense ratios on401(k) plans are supposed to be lower than thoseoninvestments offered to individuals. That is becausethe combinedassetsin many retirement ‘‘Most of the fiduciaries of these plans don’t want to do what they are supposed to do.’’ plans should be large enough to qualify for lower-cost institutional funds. In general,the greater the assetsheld in a plan, the lower the fees. Brent L. Glading, founder of the Glading Group, aconsulting firm that analyzes401(k)’s, said he welcomed the disclosure requirements but feared thatthe new rules would confuse plan participants. Employers mustwork much harder to educate participantsabout costs and benefits of variousfund offerings, he said. Unfortunately, he added,employers are not up to thetask. ‘‘The disclosure is going to make indexfunds lookbetterinsome cases, and that’s fine,’’ he said. ‘‘But you will find many active managers withfees that are justifiable becausetheir performance outperforms the index. It is clearly going to bethe responsibility of the plan sponsor to help participants understand what it all means, andIamnot sure theyare preparedforit.’’ If plan sponsors aretohelp their employees usethe disclosures to make betterinvestment choices,theyhave a lot ofboning up to do. A study issuedbythe Government Accountability Office in April found that half of the 1,000 sponsors surveyed either did not know whether they or their participants paid investment management fees orbelieved, incorrectly, to keep interest rates steady at a Wednesday meeting to keeppolitical leaders under pressure tofindasolution to the crisis. The European Commission has suggested using a eurozone rescue fund to recapitalize distressed banks directly. That could be especially helpful for Spain. ‘‘Spain is going down the drain,’’ said Charles Wyplosz, aprofessor ofinternational economics at the Graduate Institute in Geneva. Madrid facesacrucial testofinvestor confidence when it auctions bonds Thursday. The sale is expected to come at aheftycosttothe government aftera steepsell-off in debt marketsduring the ONLINE: LATEST MARKET NEWS Indexes, stock quotes and currency rates. global.nytimes.com/business FRANK FRANKLIN II/THE ASSOCIATED PRESS An AARP event in New York focused on helping older workers hone job-searching skills. Many such workers, the AARP has found, are unaware of fees applied to retirement funds. that fees werewaivedbyproviders. Investment management feesare a rather large costtobeunsure about. According to the Deloitte/I.C.I. study, these feesmakeup 84percentof total 401(k)expenses. Such ignorance might beunderstandable forsponsors of small plans, but overseers of large plans can also be clueless.According to the G.A.O. study, 31 percentof large-plan sponsors did not know whether they or their participants paid investment management fees. The report also said 29 percentof plan sponsors did not know whether their plans paid for trustee, legal or audit services. If plan sponsors do not evenknow that feesare levied,theyare surely not putting any effort into aggressively managing the costs thattheir employeesare paying in their 401(k)’s. The G.A.O. study confirms that. While almost half the plans surveyed by the G.A.O. reported thatthey did not know whether they or their participants paid transactioncosts, 95 percentof those said they had not even asked their service providers for informationregarding these costs. Whensponsors do receive an accounting of variouscosts,theyrarely Global economic indicators Top economic releases expected this week, including the median forecast of analysts surveyed by Reuters and the last reported figure. MEDIAN PRIOR PERIOD DAY COUNTRY INDICATOR FORECAST Mon. Euro zone Producer prices* for April 0.2% 0.5% Mon. U.S. Factory orders* for April 0.2% –1.9% Tue. Euro Markit services P.M.I.** for 46.5 46.5 zone May Tue. Euro zone Retail sales* for April –0.1% 0.3% Tue. Germany Industrial orders* for April –1.0% 2.2% Tue. U.S. I.S.M. nonmanufacturing index 53.5 53.5 for May Wed. Euro Gross domestic product revised ‡ for Q1 0.0% 0.0% zone Wed. Germany Industrial output* for April –1.0% 2.8% Thu. Britain Markit/C.I.P.S. services P.M.I. for May 52.5 53.3 Thu. Britain Bank of England interest rate decision for June 0.5% 0.5% Thu. U.S. Initial jobless benefit claims 377,000 383,000 Thu. U.S. Consumer credit for April (in billions) $12.00 $21.36 Fri. Italy Industrial output* adjusted for April –0.5% 0.5% Fri. Britain Producer output prices* for May 0.1% 0.7% Fri. U.S. International trade for April (in billions) –$49.50 –$51.83 *Month on month **Purchasing managers’ index ‡ Quarter on quarter Economy watch A snapshot of key figures for the world's largest economies. CURRENT COUNTRY G.D.P. in billions G.D.P. GROWTH ACC’T/G.D.P. INFLATION JOBLESS in 2011 Year over year in 2011 Year over year 2.3% United States $15,094 1.9% ‡ –3.1% 8.2% Euro zone 13,115 0.0 0.3 2.4 11.0 China 7,298 8.1 5.1* 3.4 4.1 § Japan 5,869 4.1 ‡ 2.0 0.4 4.6 Germany 3,577 1.7 5.7 2.1 6.7 France 2,776 0.2 –2.2 2.4 9.8 Brazil 2,493 0.8 –2.1 0.64 6.0 Britain 2,418 –0.1 –1.2 3.0 8.2 Italy 2,199 –1.3 –3.1 3.5 † 10.2 Russia 1,850 4.9 5.5 0.3 5.8 Canada 1,737 1.9 ‡ –2.8 2.0 7.3 India 1,676 5.3 –3.3* 7.2 n.a. Mexico 1,035* 4.6 –0.3** 3.4 4.9 South Korea 1,015* 2.8 2.9* 2.5 3.4 *Actual figures of **Actual 2009 2010 figures of † Harmonized figures ‡ Quarter on quarter annualized § Urban end March Sources: Governments, I.M.F., World Bank Reuters past weekpushed upborrowing costs. Markets have been disturbed bydata showing more than ¤66 billion, or$81.7 billion, was withdrawn from Spanish banks and sent abroad in March, adding to nervousness about financing of a ¤19 billion bailout for Bankia. Spain would prefer that the E.C.B. buy it some time by reactivating its bond-buying program. But the E.C.B. president, Mario Draghi, is likely to remain unflinching at anews conference Wednesday out of hope politicians can tiethe regioninto a tighter union. If the politicians fail, an unraveling of the euro zone could follow with potentially devastating financial consequences that could easily take acooling global economy and plunge it into recession. ‘‘What we’re seeing now would be a walk in the park,’’ said Amit Kara, an economist atUBS in London. use ittopush forlowerfees,the G.A.O. found. For example, the LaborDepartment requiressponsors to identify individuals receiving at least $5,000 in compensationforservicesrendered to a 401(k) plan. But the G.A.O. noted that 89percentof the sponsors surveyed said they did not usethe information to compare fees with those chargedby othercompanies.And 83percent said they did not usethe data to negotiate lowerfeesfromcurrent providers. ‘‘The realityis, mostof the fiduciaries of these plans don’t wanttodowhat theyare supposed to do,’’ Mr. Glading said. ‘‘Theysay, ‘It doesn’t save money for the company, sowhy do Icare?’ There has to be agroundswell from the employees.’’ Perhaps thatwill bethe main benefit of the new disclosures. It may just be thatwhen workers begin to see how investment fees and administrative costs are ravaging their retirement savings, they will start prodding the managers overseeing these plans to behave like the fiduciaries theyare. The fact is, fund companies and otherproviders of401(k)sare getting rich off these plans.And in this zero-sum game, future retireesare definitely the poorerforit. IN THE NEWS ✴ WORLD BUSINESS BEIJING DATA SHOW SLOWER GROWTH IN CHINESE SERVICES SECTOR Expansioninthe servicessectorin China slowedfor the second consecutive monthinMay, an official survey of nonmanufacturing purchasing managers showedSunday. The datafrom the China Federation ofLogistics and Purchasing came just days after two surveys of the country’s vast factory sectorshowedmomentum slowing last month. Combined,the data illustrate a worse-than-forecast deteriorationindemand at home and abroad, which increases the likelihood ofmore policy easing fromBeijing. The federation’snonmanufacturing purchasing managers’ indexfell to 55.2 from56.1inApril and 58.0 in March.A reading below 50 indicatesacontraction in activity,while areading above 50 showsanexpansion.Asubindexfor new orders edgeddown to 52.5,weighed by an easing in the services industry. The federationsoughttoplay down the decline, saying the indexreflected healthy activity. (REUTERS, BLOOMBERG) STUTTGART VW REVAMPS GROUP MANAGEMENT TO HELP IT REACH TARGETS Volkswagen elevated China’sstatus within its sprawling empire and reassertedcontrol overits wayward trucks brands withanextensive overhaul ofsenior management during the weekend, as it sought global market dominance. The company said Saturday that it had created a management board position dedicatedsolely to China — its single largest market—which will be filledby JochemHeizmann,who has beenleading itscommercial vehiclesbusinesses. Volkswagen was the first overseas carmaker to enter China three decades ago, and withits two local partners is investing ¤14 billion,or$17.3 billion,to build factories. Sincetaking charge in 2007, the chief executive, Martin Winterkorn, has transformedit fromacompany selling 5.7 million vehiclesayear to onethat sells nearly 8.4 million. (REUTERS) DUBAI IRAN SIGNS ACCORD TO INCREASE ELECTRICITY EXPORTS TO PAKISTAN Iran has made adeal with Pakistan to increaseelectricity exports to its eastern neighbor to 1,000 megawatts,the state-runFarsnewsagency reported. The Iranian deputy energy minister, Mohammad Behzad, said thatthe countries would build a transmission line for electricitybetween the city of Zahedan in southeastern Iran and Quettain western Pakistan, Fars reported on Saturday. The projectwill require an investmentof$700 million and will be jointly financedbythe two countries,theofficial Islamic Republic News Agency said. Earlier, Iran had doubledits power exports to Pakistan to 70 megawatts a day. (BLOOMBERG) TOKYO IN JAPAN, IMPASSE ON TAX INCREASE PROMPTS OVERHAUL OF CABINET PrimeMinister Yoshihiko Noda ofJapan was to make changesinthe cabinet on Mondayinanefforttowin opposition backing fordoubling the consumption tax, after his bid to healabreach in the governing party failed. The prime ministermaybow to oppositionpressuretofire TransportMinisterTakeshi Maeda and DefenseMinisterNaoki Tanaka,whowere censured by Parliament’s upperhouse in April. The prime minister said he had been unableonSunday, for the second time in a week,topersuadethe governing party powerbroker IchiroOzawa to drop his opposition to a tax increase intended to pay for rising welfare costs. (BLOOMBERG) HARUYOSHI YAMAGUCHI/BLOOMBERG Prime Minister Yoshihiko Noda of Japan. OMAHA, NEBRASKA LUNCH WITH MR. BUFFETT PERHAPS? The 13th annual online charityauction to win lunch with the investor Warren E. Buffett got under way Sunday with bidding on eBay to continue into Friday evening. The previousfour winning bids have each exceeded $2 million. Onewinner, Ted Weschler,was offered ajobbyMr. Buffett afterhe had paid nearly $5.3 million over two years to chew the fatwith him. (AP) Building pride by being vocal with praise Global Manager JULIA WERDIGIER ULRIK GARDE DUE, 49, has been chief executive of Georg Jensen, the Danish maker of jewelry and silverware, since 2007. Q. When did you first get the idea that you might become a leader? A. Igrew up sailing a lot, and somehow I was always the captain of the boat. I enjoyednot only the competitive aspect of the sport but really making theteam work together. In sailing and racing it’s all about articulating what you feelis right in a very shorttime, because you depend onso many outside factors that constantly change. As the captain ona boat it feltvery natural to metogive orders and to bethe person who helped create the rightteamwork spirit. Also, whenIwas 13 years old, Istarted making my first moneyhelping out in a grocery store. Istarted off putting groceries in bags, but Ireally quickly ended up managing the store. The local owner saw and noticedhow I embracedmerchandising ideas and sales techniques. Q. Can you give an example? A. At the beginning I was quite nervous to be atthe cash registerbecause math was not my strong point. ThenIfigured out thatthe dialogue you had with the customer was really important and how it could very quickly add to your basket size. Questions like, ‘‘Have you seen this new chocolate we’ve got?’’ or, ‘‘Shouldn’t you ratherbuy two packets ofcereal?’’ So becoming a boss was thenanatural transitionforme because since my early days it’sbeena natural way of working withpeople. Forme, leadership is about working withpeople, not necessarily having peoplework foryou. Enhancing and building team working spirit has always been partofmyupbringing. Q. When thinking about former bosses, were there things that made you swear to do it differently, once you became a boss? A. WhenIwas in my 20sIworkedfora famousFrench luxury company and I was responsible for salesinSoutheast Asia.Myboss — agreat personality — came out to do a tour of the countries.Of course I organized thattrip, and I was very exited to show all the greatthings we had done. At one point I was asked to cometomy boss’ssuite and unpack hersuitcases. Sothere I was with this regional responsibilityforrevenue in the most important partof theworld for this particular company,unpacking suitcases withlayers ofbeautiful clothesallwrapped individually in silk paper and hanging theminthe closet. Icould laugh about it atthetime, but wheneverIthought about it since, it’s really this very important borderline betweenpersonal and professional. While Ibelieve a very personal management style is key to success, it’s very important alsotohave that separation. GEORG JENSEN Ulrik Garde Due said managers must balance the personal and the professional. Q. What about the other extreme? What do you remember being really impressed by in a boss? A. My biggest and most important mentorinmycareer has beenRose Marie Bravo, for whomIworkedat Burberry for almost 10 years. Imet her in New York whenshewas at Saks Fifth Avenue. You walkedinto Saks and askedsomebody how itwas to work for Saks, and heorshe would say, ‘‘I work for Ms. Bravo.’’ So somehow that message and that individual connection camethrough with everyone in that store feeling they wereworking for Ms. Bravo and willing to gothatextra mile. Thatwas really a fantastic, positive way formetosee how you can runa very big company but also stay closeto theemployees. Q. How do you get people to follow you and the company strategy and culture? A. It’s important as soonaspossibleto figure out people’sstrengths and weaknesses and makeeveryoneunderstand how importantteamwork is. At Georg Jensen, for example, it has been very interesting formetowork out of differentoffices. It’salways about being as personable as you can whendealing withpeople and just getting under that bureaucratic layer,especially in Asia,through that feeling of authority. The big challenge has been that at Georg Jensen, and ofteninDenmark, I feel there’s this way of working in a very understated, sometimeshumble, way. It’sabout not being as loudasyou would be in America or othercountries about how to be successful, about how to drive the business, giving prideto theteam for whattheyhave achieved and bevocal about it. In theold Georg Jensenculture, we tendednot to talk about itwhen we did greatthings and didn’t praise people enough to keep themmotivated. Sothat was oneof the firstthings I did whenI joinedGeorg Jensen,toreally praise people and to make surethat people also know when they didn’t dotheir work well. Q. So what was missing was feedback. How did you decide that that was important? A. Iknow myself thatthere’snothing more importantthanapatonyour back whenyou’ve donewell. Everybody deserves thattobe stimulated.WhenI think of the different bosses I had throughout my career, someof them werevery goodat praising and I saw how that helped to build my self confidence and how I wanted to do evenbetter. Q. How do you deal with big decisions and how do you make them when times are difficult? A. It’s very importantwhen we go through a difficulttime, and we all do, to communicate with theteam about whereweprioritize and whereweput ourfocus. Communicationiskey throughout managing the company in difficulttimes.Making sure you set the agenda and communicate itwell and making surethat everyone buys into it and then executes accordingly. In difficulttimes,there is even a biggerneed to stand on the box and communicate withpeople becauseof theuncertainty thatexists. The world isn’t simple. Subscribing to it is. Get home delivery of the International Herald Tribune @ subs.iht.com
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